Energy, Climate, and Austin

As the federal government reverses course on climate change policy at the national level, the question remains – how much should local governments do to pick up the slack?

In the weeks and months since President Donald Trump announced that he is withdrawing the US from the Paris Climate Agreement, governors, mayors, and business leaders from across the country have announced their intentions to step up in the federal government’s absence. More than 1,000 governors, mayors, businesses, investors, and colleges signed the “We Are Still In” pledge, vowing to adopt emission reduction goals to help the US meet its original goals laid out in the Paris Climate Agreement. The US Conference of Mayors (which includes Austin Mayor Steve Adler) approved a resolution that set a goal of powering all of its member cities with 100 percent clean, renewable energy by 2035.

In Austin, many are now wondering if all of this talk will actually turn into action. The first test of that seems to be an update to the Austin Energy Resource, Generation, and Climate Protection Plan.

One of the biggest ways that Austin has already begun taking action on climate change is by reducing emissions from Austin Energy, our city’s publicly-owned electric utility. Since Austin Energy is essentially owned by all of us (the customers and taxpayers), we have a say in where the utility decides to get its energy. This is done through something called generation resource planning.

Every few years, the city’s Austin Energy Resource, Generation, and Climate Protection Plan is updated. The plan basically serves as a roadmap, determining where Austin will get its energy for the next several years. Will it come from solar, wind, coal, natural gas? That’s what the plan helps to decide.

Over the past few months, a citizen working group has been working on putting together a list of recommendations for the plan, which ultimately needs to be approved by City Council. Their core recommendation is to increase our city’s renewable energy goal to 65 percent by 2027, and to do so while maintaining the city’s current affordability goal of capping rate increases at 2 percent per year and keeping rates in the lower 50th percentile of rates statewide.

Other recommendations made by the working group include:

An increase in Austin Energy’s energy efficiency and demand response goals to 1000 MW by 2027

A reaffirmation of the existing goal to begin retiring Austin’s only remaining coal-fired power plant by 2022

Maintain existing local solar production goals (200 MW by the end of 2025), as well as create enhanced incentives and programs to bring solar to affordable housing projects by 2018

Study and possibly pilot a utility-managed rooftop solar program that requires no investment from participants

Increase local energy storage goals by 10 MW over the previous goal

So what do people think about these recommendations?

Austin Energy has announced its support for the goals laid by the working group, saying that they achieve major environmental goals, while minimizing risk and keeping electricity rates affordable.

In an interview with the Austin EcoNetwork, Khalil Shalabi (Vice President of Strategy, Technology, and Markets) explained that from a carbon perspective the working group recommendations go pretty far toward turning Austin Energy into a completely carbon-free utility. He explained that when the 65 percent renewable energy goal is combined with the utility’s energy production from a carbon-free nuclear power plant, Austin Energy looks pretty close to being a carbon-free utility.

But above all, these organizations are calling for a pledge to make Austin Energy 100 percent carbon-free by 2030.

“Cities can fill the void caused by President Donald Trump withdrawing the U.S. from the historic Paris Climate Accord,” explains a Facebook page calling for the 100 percent carbon-free energy by 2030 pledge. “AND AUSTIN SHOULD LEAD THE WAY!”

The Facebook post goes on to explain that the working group recommendations aren’t ambitious enough, and that although Austin Energy has been a leader on climate in the past, more and more cities are now setting the bar higher and higher. “…The standard for leadership is now 100 percent renewable energy,” concludes the post.

Cyrus Reed, conservation director with the Lone Star Chapter of the Sierra Club and a member of the working group, has struck a slightly different note. He continues to support the working group’s recommendations, saying that they move the ball forward while achieving a good amount of consensus amongst the many stakeholders Austin Energy works with.

“Sierra Club believes a net-zero carbon emissions goal is achievable by 2030, although a specific analysis has not been conducted,” Reed wrote in a blog post on the topic. “An additional study by the utility would help convince all of our stakeholders — including large commercial and industrial customers and advocates for low-income communities — that it is achievable and affordable and that study should be conducted within the next two years.”

The working group recommendations do include a request that Austin Energy study what it would take for the utility to embrace a 75 percent and 80 percent renewable energy goal by 2027. According to Reed’s estimation, there will still be time to commit to the 2030 goal in a few years once the study is done.

What about the cost?

When Austin Energy is asked to meet new renewable energy and climate goals, it’s always instructed by City Council to do so while meeting certain affordability requirements. Right now that means capping rate increases at 2 percent per year and keeping rates in the lower 50th percentile of rates statewide. Luckily, the cost of renewable energy has gone down so rapidly in recent years, that Austin Energy has been able to transition to renewable energy while maintaining these affordability goals.

In fact, utility scale renewables are now one of the cheapest new generation sources the utility can buy. So then why can’t Austin Energy just go 100 percent renewables tomorrow?

The answer is complex, but one of the reasons has to do with how the utility actually buys and sells energy. Here’s how it works – Austin Energy buys all of its energy on the open Texas electricity market (called ERCOT). Then, in order to meet environmental goals and to earn some extra money, Austin Energy sells electricity that it produces (from our natural gas, solar, wind, and coal plants) back into the market. One of the ways that Austin Energy is able to keep electricity rates low for customers is by owning dispatchable power plants that can turn on quickly and sell energy back onto the Texas market when demand and rates are high.

According to Shalabi, although the cost of buying renewable energy plants is low, the utility doesn’t really make any money off of them because they aren’t dispatchable. You can’t control when the wind blows or when the sun shines.

However, there is some good news for renewable advocates on the horizon. Just this week, Austin Energy announced that it has entered into a contract for 200 MW of coastal wind, which tends to blow during the day when electricity rates are high and might actually become a revenue generator for the utility. Battery storage also has the potential to turn solar and wind into dispatchable technology, but at the moment, it’s still quite expensive. A grant from the Department of Energy has actually allowed Austin Energy to purchase 3 MW of storage and conduct research about how best to use battery storage in the future. In other words, the technology is coming, it’s just a matter of when it can be deployed en masse (and at what price).

Several other cities around the country have also already figured out ways to make 100 percent carbon-free energy work at an affordable price. For more on what other cities are doing to reduce their carbon footprint (and how Austin compares) stay-tuned into AustinEcoNetwork.com for another blog post coming out later this month.

The group of environmental organizations who are pushing for stronger renewable goals have plans to attend the hearing and ask City Council to adopt a carbon-free by 2030 goal. They’re asking for anyone who supports them to attend the meeting as well, wear green, and bring signs. You can learn more about their efforts here.